Bitcoin Sees Modest Recovery Amid Economic Uncertainty

Bitcoin Recovery and Market Sentiment

Bitcoin showed a modest recovery on Wednesday, rising 2.3% to $81,871.0, partially offsetting recent declines. However, gains were capped as risk aversion lingered, driven by U.S. trade tariffs and slowing economic growth. The broader crypto market remained muted, with many cryptocurrencies still reeling from heavy losses over the past two weeks.

Economic Concerns and Tariff Impact

President Trump's 25% tariffs on steel and aluminum imports, effective Wednesday, heightened economic uncertainty. While Trump expressed confidence in avoiding a recession, markets remained cautious. The tariffs, combined with exemptions for key sectors in Canada and Mexico, have fueled concerns about inflation and growth. U.S. stock markets extended their decline, spilling over into crypto markets, where speculative assets are often sold during periods of volatility.

Inflation Data Provides Some Relief

February's inflation data offered a positive note, as the consumer price index (CPI) rose less than expected. The CPI increased 0.2% for the month, bringing the annual rate to 2.8%, while core CPI, excluding food and energy, also climbed 0.2% to an annual rate of 3.1%. Both figures were below economists' projections, suggesting easing inflationary pressures despite tariff concerns.

Broader Crypto Market Performance

While Bitcoin saw a modest uptick, other cryptocurrencies showed mixed movements. Ether slipped 0.4% to a three-year low of $1,860.22, while altcoins like XRP, Cardano, and Solana gained between 2% and 5%. Meme tokens also saw some movement, with Dogecoin rising over 6% and $TRUMP adding 1.4%. Despite these gains, the crypto market has erased all gains since Trump's November election victory, trading well below January's record highs.

The crypto market continues to navigate a challenging environment, with economic uncertainty and risk aversion dominating sentiment.